The airline distribution ecosystem often gets unfairly labeled as being populated by dinosaurs. Our sense is that industry players are making genuine attempts to modernize, it’s just that it takes a long time to turn around such a titanic ship. We break down this complex and, at times, intimidating topic by reviewing the current landscape and inspecting four key fault lines in the space.

Report Overview

Airlines need to send travelers to and from all corners of the world. That requires casting a wide net to reach all of those customers, and in doing so, they have built a complex web of distribution intermediaries.

Outside of the direct sales channel, each intermediary has evolved to best service its niche of customers. This broad distribution network includes online travel agencies, metasearch sites, traditional offline travel agencies, and travel management companies.

In addition to customer-facing intermediaries, global distribution systems (GDS) are back-end aggregators of inventory and play a large ‘behind-the-scenes’ role in enabling the inventory of travel agencies (offline and online) and travel management companies.

The global distribution systems are critical to the airline ecosystem, yet because we do not interact with them as consumers, they are cryptic and intimidating to many. We devote a number of pages in this report toward contextualizing the long, and at times contentious, relationship they have had with the airlines they serve.

Then, looking forward, we define four key questions through which we can better understand the future of airline distribution: 1) Does the world still need the Global Distribution Systems? 2) What is the New Distribution Capability and how will it impact air travel? 3) Can airlines really de-commoditize bookings? and 4) Does Silicon Valley have a role to play in airline distribution?

What You'll Learn From This Report

How to untangle the complex and interlocking airline distribution landscape

A history of the global distribution systems and their relationship with the airlines